As demand for carbon credits rises due to tighter compliance norms thereby pushing up prices, exchanges worldwide are eyeing an entry into the lucrative emissions trading market.
Carbon credits are ‘compliance commodities’ and can be traded along with any other commodities. At present, one carbon credit is estimated at ¤13-15 (Rs 747-861). Developed countries are bound by Kyoto Protocol to cut greenhouse gas emissions between 2008 and 2012, by at least 5 per cent of the 1990 level. One way of reducing emissions is by buying certified emission reductions or carbon credits of projects set up in developing countries.
A project, for instance, becomes eligible to sell one credit if it reduces 1 tn of greenhouse gas emission. The European Climate Exchange is planning to launch futures and options contracts of carbon credits in September, subject to regulatory approval.
Carbon credits are ‘compliance commodities’ and can be traded along with any other commodities. At present, one carbon credit is estimated at ¤13-15 (Rs 747-861). Developed countries are bound by Kyoto Protocol to cut greenhouse gas emissions between 2008 and 2012, by at least 5 per cent of the 1990 level. One way of reducing emissions is by buying certified emission reductions or carbon credits of projects set up in developing countries.
A project, for instance, becomes eligible to sell one credit if it reduces 1 tn of greenhouse gas emission. The European Climate Exchange is planning to launch futures and options contracts of carbon credits in September, subject to regulatory approval.
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